One of the newest crazes sweeping college campuses today (and frankly also in adult circles) is poker. Some colleges have poker tournaments, while others have weekly poker games in their dorms.

The popularity of poker can be traced to games broadcast on stations such as ESPN, which features Texas Hold'em tournaments, where top players compete for million-dollar prizes. Some of these players say their success is based on analyzing their opponents. Facial expressions, body posture and other mannerisms are taken into consideration before the player decides to go "all in"—putting all his chips into the pot.

Many salespeople consider themselves good poker players. They can read other players just as they can read the expressions and mannerisms of their customers, noticing when to push for a sale and when to back off.

But what happens when you can't physically see a prospective customer and you decide to go "all in" and sell your products for a lower price than you normally would? That's effectively what happens when distributors participate in reverse auctions.

The growth of reverse auctions is on the rise. Our 58th Annual Survey of Distributor Operations shows that 32 percent of the 800 respondents now participate in such auctions, up from 18 percent the year before. And most of those who have joined in such buyer auctions say the experience has been less than favorable.

One distributor told us recently that a customer decided to go the auction route. The distributor participated and re-won the contract, only at a lower price. He's now making half the profit he made previously, and since he didn't know the opposing bids, wonders if he left too much money on the table. Or was the customer simply trying to beat him up on price from the beginning, intending to choose him all along?

Before any distributor can hope to join in such an auction, he has to have a complete grasp on his cost structure. By bidding X amount of dollars, can he still make a profit?

The worst thing any distributor can do is get caught up in the action and try to get the business at any cost by going "all in," as one distributor did recently. Know when to hold 'em and know when to fold 'em, as singer Kenny Rogers advises, and you'll be around to play another day. That's a sure bet.

jkeough@reedbusiness.com